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Why Citizens Financial is Worth Adding to Your Portfolio

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Citizens Financial Group, Inc. (CFG - Free Report) is on track to ramp up its profitability in 2018 with fresh “Tapping Our Potential (TOP) program” objectives, launched in mid-2017. Additionally, the recently-launched TOP V program is anticipated to deliver pre-tax benefit in 2019 as well. Further, its strong capital position, reflected by inorganic growth strategies and steady capital deployment activities, will support growth.

Citizens Financial’s shares have gained 13.5% in the past two years, versus the industry’s decline of 5.7%.

Also, the company’s Zacks Consensus Estimate for current-year earnings have been revised 1.4% upward, over the last 60 days. Currently, the stock carries a Zacks Rank #2 (Buy).



Why the Stock is Worth Buying

Impressive Initiatives: Citizens Financial’s TOP program focuses on improving its financials and revamping profitability. The company expects to achieve a pre-tax benefit of $105-$110 million in 2018. Additionally, the recently-launched TOP V program is anticipated to deliver pre-tax benefit of $90-$100 million by the end of 2019.

Revenue Strength: Citizens Financial continues to witness top-line improvement. Since 2015, the company has recorded a continued rise in its sales, witnessing three-year compound annual growth rate (CAGR) of nearly 10.6% in 2017.

The company’s projected sales growth (F1/F0) of 7.62% (as against the nil industry average) indicates constant upward momentum in revenues.

Earnings per Share Strength: Over the past three to five years, Citizens Financial witnessed earnings per share (EPS) growth of 24.5% compared with 13% for the industry. Notably, the company also recorded an average positive earnings surprise of 3.57%, over the trailing four quarters.

Also, the company’s long-term (three to five years) estimated EPS growth rate of 36.2%, compared with 24.5% for the industry, promises rewards for investors over the long run.

Efficient Capital Deployment: Apart from an ongoing share-repurchase program, the company displayed its strong balance-sheet position by increasing the quarterly common stock dividend by 23% from the third quarter. Also, it looks forward to raise dividends to about 32 cents in 2019.

Stock Looks Undervalued: The stock currently has a Value Score of B. The Value Score condenses all valuation metrics into one actionable score that helps investors steer clear of “value traps” and identify stocks that are truly trading at a discount. Our research shows that stocks with a Style Score of A or B, when combined with a Zacks Rank #1 or 2, offer the best upside potential.

Other Stocks to Consider

Greenhill & Co., Inc. has been witnessing upward estimate revisions for the past 60 days. Moreover, this Zacks #1 Ranked stock has rallied more than 26% year to date. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

E*TRADE has been witnessing upward estimate revisions for the past 60 days. Further, the company’s shares have gained 4.6% year to date. Currently, it sports a Zacks Rank of 1.

Great Southern Bancorp, Inc. (GSBC - Free Report) has been witnessing upward estimate revisions for the past 60 days. Additionally, the stock has jumped around 4.5% year to date. It currently carries a Zacks Rank #2.

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